Gulf Island Fabrication, Inc. (GIFI)

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Gulf Island Fabrication, Inc. (GIFI)

Q2 2014 Earnings Call

July 25, 2014 10:00 am ET


Cindy Cook - Accounting Manager

Kirk Meche - President & CEO

Jeffrey Favret - VP - Finance, CFO

Todd Ladd - COO


Will Gabrielski - Stephens

Martin Malloy - Johnson Rice



Good morning and welcome, ladies and gentlemen, to the Gulf Island Fabrication, Inc. Q2 2014 Earnings Conference Call. All participants will be in a listen-only for the duration of the presentation. After the presentation, we will conduct a question and answer session. Instructions will be given at that time. Today's call is being recorded.

At this time, I'd like to turn the conference over to Ms. Cindy Cook for opening remarks and introductions. Ms. Cook, please go ahead.

Cindy Cook

Thank you, Anna. I would like to welcome everyone to Gulf Island Fabrication's 2014 second quarter teleconference.

Please keep in mind that any statements made in this conference that are not statements of historical fact are considered forward-looking statements. These statements are subject to factors that could cause actual results to differ materially from the results predicted in the forward-looking statements. These factors include the timing and extent of changes in the prices of crude oil and natural gas, the timing of new projects and the company's ability to obtain them, and other details that are described under Cautionary Statements Concerning Forward-looking Information and elsewhere in the company's 10-K filed March 7, 2014. The 10-K was included as part of the company's 2013 annual report filed with the Securities and Exchange Commission earlier this year. The company assumes no obligation to update these forward-looking statements.

Today, we have Mr. Kirk Meche, President and CEO; and Mr. Jeffrey Favret, our Chief Financial Officer; and Mr. Todd Ladd, our Chief Operating Officer. Mr. Meche?

Kirk Meche

Thank you, Cindy, and good morning to all of our listeners. I will provide updates on existing projects, a general overview of the market and opportunities that exist for our company. I will also touch briefly on a cooperative agreement we signed yesterday with Bechtel Oil, Gas, and Chemicals. I will then turn the call over to Mr. Jeff Favret, our Vice President, Finance, and Chief Financial Officer for a breakdown of the financial information for the second quarter of 2014. At the conclusion of the Mr. Favret's report, we will open the lines for questions.

I will begin with an update on the projects currently under contract. At our Texas facilities, we continue to fabricate a 1,200-foot jacket, the associated piles and topsides for the Gulf of Mexico destination. Deliveries for these units are scheduled for late summer of 2015. We also continue to fabricate two tank barges with deliver set for the third quarter of 2014. We also are in the process of receiving material for our pile job in which the award was received this quarter.

At our Louisiana facilities, work continues on several jackets and topsides for shallow water projects which include domestic and foreign locations. Efforts for a major offshore hookup and integration project for a large deepwater platform in Gulf of Mexico continues with work anticipated to complete in latter part of this. We continue to work on several vessels, including the large lift boats scheduled for deliver in the latter part of the third quarter of this year, as well as two offshore supply vessels scheduled for delivery this summer in the latter part of this year, respectively.

As recently announced, we are preparing for the construction of two river towboats scheduled for delivering the second quarter of 2015. Our drydock remains active with opportunities for work going forward.

Now onto the market conditions. We expect bids for deepwater projects to be available in later part of 2014 or early 2015. We had seen these projects continue to push to the right over the last several months and believe this trend to continue. Bidding activities for shallow water projects, non-traditional Gulf of Mexico marine related projects, wind projects and support work associated with deepwater structures are expected to increase from current levels over the next two quarters.

In prior quarters, we spoke about strategic plans to acquire the opportunity to obtain additional work, which included but was not limited to teaming, partnering or joint venturing with several companies for opportunities that exist. Yesterday, we issued a press release announcing the cooperative agreement we signed with Bechtel Oil, Gas, and Chemicals. We will combine the talents and expertise of each of our respective companies to pursue EPC and EPCI contracts. This will give us greater opportunities to markets in the Gulf of Mexico, as well as oversees. We are extremely excited by the possibilities that exist for this type of arrangement and what we collectively offer to our clients.

Before I conclude, I would like to say a few words about our Founder and Director Emeritus Mr. Alden J. (Doc) Laborde. Doc passed away during the second quarter of this year. He was a pioneer in the oil and gas industry with many contributions to this industry, including the formation of Gulf Island Fabrication in 1985. We are honored to have known and work with this gentleman. He will be sadly missed but never forgotten.

I would now like to turn the call over to Mr. Favret who will discuss our financial performance for second quarter 2014. Jeff?

Mr. Jeff Favret

Thank you, Kirk, and good morning everyone. I'll discuss highlights from the quarter, provide specifics for our financial performance and then, we'll open the call to your questions.

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